Sportingbet To Provide Back Office For Sports.com

by Jason Gorringe, Tax-News.com, London

15 July 2002

Sportingbet, which claims to be the world's largest online sports betting company, last week announced that it would provide back office services for Sports.com, a portal which is moving away from its historical emphasis on content towards a concentration on betting facilities.

Nigel Payne, chief executive of Sportingbet, said that Sports.com currently had 3m audited users per month, and he expected that the deal would be very profitable for Sportingbet.

After a phase in which on-line betting and gaming operations were launched in their hundreds - there are reputed to be more than 2,000 on-line casino and sports-betting sites - the industry is now consolidating rapidly as smaller sites find it too costly to maintain state-of-the-art on-line facilities. The provision of credit-card payment facilities has also become a major difficulty for smaller sites, since many banks are frightened of falling foul of the US authorities, especially post 9/11.

Smaller sites thus often turn to established operators such as Sportingbet to benefit from theit superior technical and financing facilities. Nigel Payne says that many quite well-known betting sites are in a bind, unable to raise sufficient capital to lift their facilities and their traffic to a level which would be profitable.

Alderney-based and licensed Sportingbet is listed on London's Alternative Investment Market (AIM) and reported a profit for 2001 of UK£7.5m. Sales in the final quarter of 2001 were UKP352.5m and customer numbers grew 56,285 quarter-on-quarter to 488,457. The company has grown rapidly through acquisition: a year ago it bought SportsBook, operating under an Antiguan gambling licence and with nearly 350,000 customer accounts, 92% of them American; and in May 2000 the firm acquired Betmaker, based in Costa Rica and now rebranded as SportingbetUSA.com. It also expanded its presence in the Asia-Pacific region with an GBP11.5m ($16m) deal to buy The Number One Betting Shop, Australia's largest private bookmaker.

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